H.R. 3086, Permanent Internet Tax Freedom Act

Cost Estimate
June 26, 2014

As ordered reported by the House Committee on the Judiciary on June 18, 2014

H.R. 3086 would make permanent a moratorium on state and local taxes on Internet access and some taxes on electronic commerce. Under current law, the moratorium is set to expire on November 1, 2014. CBO estimates that enacting H.R. 3086 would have no impact on the federal budget, but beginning in 2014, it would impose significant annual costs on some state and local governments. The bill would not affect federal direct spending or revenues; therefore, pay-as-you-go procedures do not apply.

By permanently prohibiting state and local government from collecting certain types of taxes, H.R. 3086 would impose an intergovernmental mandate as defined in the Unfunded Mandates Reform Act (UMRA). CBO estimates that the mandate would cause some state and local governments to lose revenue beginning in November 2014; those losses would exceed the threshold established in UMRA for intergovernmental mandates ($76 million in 2014, adjusted annually for inflation) beginning in 2015. CBO estimates that the direct costs to states and local governments would probably total more than several hundred million dollars annually. The bill contains no private-sector mandates as defined in UMRA.